Zoom Performed Poorly, but Long-Term Future Remains Bright Says Artisan Partners

Insider Monkey2021-03-17

Artisan Partners Limited Partnership, a high value-added investment management firm, published its ‘Artisan Global Discovery Fund’ fourth quarter 2020 investor letter. A return of 16.95% was recorded by its Investor Class: APFDX, 17% by its Advisor Class: APDDX, and 17.05% by its Institutional Class: APHDX, in the fourth quarter of 2020, outperforming its MSCI All Country World benchmark that delivered a 14.68% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Artisan Global Discovery Fund, in their Q4 2020 investor letter, mentioned Zoom Video Communications, Inc. (NASDAQ: ZM) and emphasized their views on the company. Zoom Video Communications, Inc. is a California-based communications technology company that currently has a $100.3 billion market capitalization. Since the beginning of the year, ZM delivered a 1.99% return, impressively extending its 12-month gains to 209.65%. As of March 15, 2021, the stock closed at $350 per share.

Here is what Artisan Global Discovery Fund has to say about Zoom Video Communications, Inc. in their Q4 2020 investor letter:

"Among our bottom contributors in Q4 was Zoom Video Communications. Shares of Zoom Video Communications were pressured amid the strong vaccine data released during the quarter. Furthermore, the company’s Q3 results, though incredibly strong, showed signs of deceleration from prior quarters’ torrid pace. While there will be a reduced need for some videoconferencing use cases on the other side of the pandemic, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—given sustainably higher remote work arrangements, more online learning options and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YOY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we acknowledge the near-term headwinds and have trimmed our position to a modest size."

Roman Samborskyi/Shutterstock.com

Our calculations show that Zoom Video Communications, Inc. (NASDAQ: ZM) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Zoom Video Communications, Inc. was in 59 hedge fund portfolios, compared to 56 funds in the third quarter. ZM delivered a -13.52% return in the past 3 months.

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Comments

  • meepmeep
    2021-03-17
    meepmeep
    Bam
  • ReganF
    2021-03-17
    ReganF
    The future is virtual. But they need to compete with free alternatives. 
  • Zarkness
    2021-03-17
    Zarkness
    Zoom will be targeted as long reopening of economy. Pls like and comment
  • Huatah0810
    2021-03-17
    Huatah0810
    Like and comment pls thanks ~
    • Alvin1975: 
      Like and comEnt pls
    • GMJ: 
      Please help to like back! Thank you
  • JimmyChua
    2021-03-17
    JimmyChua
    More people are working from home. Schools are teaching with zoom. Should be stable over the long term
  • Itstheend
    2021-03-17
    Itstheend
    It’s the end
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